In my legal work I come across some interesting dilemmas with clients. The issue that is the most challenging is understanding the client’s scope of practice. Many professionals are licensed. In Massachusetts the Division of Professional Licensure (DPL) is an agency within the Office of Consumer Affairs and Business Regulation. The DPL oversees 31 boards of registration, which license and regulate more than 370,000 individuals and businesses to practice some 50 trades and professions in Massachusetts. If you are licensed, then you need to stay within what you were trained or educated to do. For example, you cannot be a home inspector and then do mold remediation.
This happens frequently when people want to change their profession, but find it difficult to make the educational commitment (whether it is cost or time). Instead they find something “close,” which they can do on the weekends or online. It sounds like a great idea.
It’s not. The simple reason is a liability issue arises. I recently learned about a health coach doing nutrition counseling. In Massachusetts dietitians and nutritionists are licensed and will be reimbursed by insurance companies. A health coach may provide information, but it will not be covered by insurance. Other states have other rules, and in Florida the health coach is being sued because nutrition and supplement information is not what a health coach should be doing in that state, only licensed registered dieticians are allowed.
Be careful of licensing issues and staying within your scope of practice. Know the rules in your state. If there is no licensing, then a professional association in your field should be able to help provide guidance.
“You need insurance.”
I say this to all my clients, which is surprising because you may not know that the legal profession and insurance profession are often at odds with each other. Each profession believes that they are the only solution for a business. As a licensed insurance advisor and attorney I look at both and can tell you that both legal documents and insurance coverage are needed.
If you are a service business with an office (can be a home office, too), then you need a legal contract that explains to your client your services, your fees, how you get paid and providing protection in case something goes wrong. However, an agreement can only go so far.
What if something goes wrong?
What if your client trips or slips in the snow or ice at your location. What legal document is going to protect you?
None.
A property insurance product will provide you with peace of mind protection. You can also get insurance that provides protection for mistakes you may make while conducting your profession.
Remember to review what you currently have, and give True North Business Consulting to make sure that your business is protected legally and you have the right insurance products.
A snowstorm is a good reason to stay in and I can always find something to do. This time though I caught back to back episodes of the Property Brothers. If you have not seen this show on HGTV then you are missing out on Jonathan and Drew, twins that help find and remodel homes (in Canada). In each episode there is doubt by the buyers that the house can be remodeled to the way they want it—they cannot see what Jonathan sees.
It is the same with mediation. Unless you have been involved in a mediation, then it is difficult to understand and see what is going on. Most people are familiar with courtroom dramas and judges making a decision. Most cases settle using mediation or negotiation where you are part of the decision, have more of a say and can usually keep the business relationship intact.
For the new year why not try a new perspective? Think about using mediation for your disputes or before entering a contract negotiate and get negotiation coaching from True North Business Consulting. I understand that you know your business, but I frequently see that people do not know the legalities of their business. Take the time to take a new look and avoid problems later. I also offer a UDEMY class for those who want more information on alternative dispute resolution, which is the opposite of litigation.
It is that time of year again when shopping becomes important on a personal level. Black Friday heralds the time period that retail stores run in the black instead of the red. If you are a service business how does this affect you?
If you do not offer gift certificates, then if you offer a wellness service, coaching service or consulting service you may want to consider doing so. Send out an email to your clients to remind them there is still time for them to make the purchase. For the gift certificate itself, think about cardstock for a nice presentation with an envelope to match. In addition, keep track of what you sell and respect Massachusetts laws that allow for a 7 year expiration date.
You may be thinking how you have gotten great deals on Groupon and Living Social. Offering discounts with these companies can help your business, but remember you are entering a contract. This should be reviewed by an attorney so you understand your responsibilities. You want to make sure there is a shorter expiration date on any of your offerings and if it is not used, then the amount can be applied to another service (just not at a discounted rate). With Groupon the hope is that you will keep the client, but there is a low retention rate since many Groupon and Living Social shoppers are looking for the next, best deal.
True North Business Consulting does not offer gift certificates, but we do have books for Health & Wellness Professionals and Contractors along with a DVD program that make great gifts!
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For those unfamiliar with Alternative Dispute Resolution, or ADR and want to know more about it so that you can use it in your business, then I have created a course with Udemy (an academy of you). The first 50 people receive $10 off, that is half price, but it is only for a limited time so take advantage NOW to learn about using the processes negotiation, mediation and arbitration in an hour. Use code 10OFFADR at UDEMY.
Many small business owners have a home office. This can be very convenient, limiting travel and expenses like rent. When it comes to accounting, I am sure there are ways where a portion of the space is a possible expense to your business, but there are legal ramifications that you should consider.
First, if you are working from your apartment where you are a tenant, then you need to make sure that having a business on the premises is allowed. Many leases do not allow you to work from home. From the landlord’s point of view this may be due to the increase in traffic or that you may be storing goods on the premises. Plus, you may be need services like additional cable lines that the landlord was not planning on.
What about if you own a condo? This time is may be the condominium association that could have rules about a business on the premises. But, what if your business is just online and you do not have people coming by? It may not make a difference according to your condo documents and the board.
If you are a homeowner, then your concern is advertising and keeping your liability at a minimum. If you want to place a sign outside, then you need to make sure with the city or town that you are allowed to do so. In addition, if you have anyone visit your residence please make sure that it is safe-especially clean walkways.
In all of these cases, you do need to register with the town to tell them you are doing business there. Think about buying insurance for your protection plus reviewing leases and condo documents.
I teach undergraduate students at a local university. We just finished covering torts and negligence, which is always a fun subject as the students suddenly see the potential for lawsuits everywhere. In fact, one assignment was to look for possible claims around campus. I didn’t realize the campus was a death trap!
Torts are a civil wrong that leads to harm which results in legal liability. Some examples of torts are defamation, copyright infringement and false imprisonment. Negligence is within the study of torts and is based on the belief that there is a duty of care owed. If there is a breach in that duty that caused injury, then people sue for negligence. For example, supermarkets need to keep their floors clean, and when there is an issue need to mark it accordingly, if not then someone could slip and fall.
Negligence and tort claims can happen to anyone in a business. You need to be aware of the issues and then go about protecting you and your business with a combination of contracts, business entities and insurance.
This is the second part discussing the pitfalls of standard leases. The first part dealt with residential leases, and this part will discuss commercial leases. As an attorney and summary process mediator handling evictions, I have been witness to commercial lease issues. Many of these disputes can be avoided by following four easy tips.
1. Clear business names
The first part of any lease is the names of the parties involved. As most landlords want a personal guarantee, this means the correct names of the commercial tenants are needed. Before writing the lease, ask for a copy of the prospective tenants’ drivers’ licenses along with current home addresses, cellphone numbers and email addresses.
If the tenants have formed a business entity, then you should also ask for a certificate of incorporation. This is either free from the state or requires a small fee to be paid by the tenant.
This verifies that the people who are signing the lease are who they say they are.
2. Fast money
Hopefully, the commercial tenancy is a wonderful experience with a long-lasting tenant who has a successful business. However, what happens if the tenant is unable to pay. Most standard leases state something like, “when the tenancy is completed, then the landlord can be reimbursed.” What does that mean?
Let’s say that you have a 5 year lease with ABC Corp. Two years into the lease, ABC Corp stops paying you. You want the remaining money due on the lease-right? Well, you have to wait until the lease expires, which is another 3 years to be able to collect your rent.
To fix that issue you near an acceleration clause that in effect says that when the contract is breached due to nonpayment, then the whole lease becomes due immediately. No waiting.
3. Additionally
Even in the standard lease there is a section titled INSURANCE where it is the tenant’s responsibility to get insurance. The landlord fills in the amount they require. First, there needs to be follow up. An insurance binder or proof of insurance needs to be held by the landlord, however, even better is for the landlord to be named as an Additional Insured.
When a landlord is named as Additional Insured, the landlord will be contacted when there is a change in the policy and if the tenant stops paying the insurance. Therefore if there is a loss, then there are no surprises. The landlord knows who the insurance company is and can make a claim.
Also, in regards to insurance, make sure your tenants are getting the right kind of insurance. For example, if there are storefront windows, then glass coverage should be a requirement.
4. Utilize the business
It is amazing how few landlords know anything about the businesses that are using their spaces. It should not be a surprise what the tenants do in the space you have rented to them. You should be a customer of their businesses and recommend them when you can. For example, if you rent to a restaurant, then be a patron of that restaurant. You should also pay full price. Why? They pay you full rent, and you want their business to be a successful. (Though I am fine with free dessert.)
There is also a marketing opportunity you may be missing by not promoting a business that you rent to. Many commercial landlords have websites, and on these websites my suggestion is that you add logos of the businesses that rent from you. (You need the tenants to send you the logos and give permission.) What a great way for you to get attention to your commercial property, while helping your tenant succeed!
These four tips will help you have a business relationship with your tenants along with decreasing your issues.
I eat too fast. It is a horrible habit, which I am working on because I want to enjoy my meal, taste the flavor and ideally, not choke. With business decisions many people have the same habit. Say yes, sign the contract in a hurry.
Like food though, you want to be able to reap the rewards, and well, not choke.
My first question when reviewing a contract when there is ongoing payment involved is to ask, “What is your threshold?”
What is the amount of money you can comfortably risk?
Ideally, the thought is that you want to take away more than your investment, but what if you lose that amount? Set your marker—I believe in taking risks, but they should always be calculated.
Enjoy your food and enjoy your contracts.
Conflict resolution really does resolve conflicts. After attending and presenting at the New England Chapter of the Conflict Resolution Association, I learned how so many companies are incorporating conflict resolution into their culture.
In today’s environment of Yelp and Facebook, bad reviews can truly hurt a business and when your first line does not understand how to negotiate, then the customer will deal with the issue in their own way—online.
It can be very expensive to fix an online reputation. What to do instead? Commit to conflict resolution. Here are some tips:
1. 1. Be trained in collaborative negotiation. You and your staff can benefit from this training- not only using it in person, but on the phone and via email too. My friend had an issue with a restaurant in Florida. She was treated rudely via email! So much so that she escalated the issue to report the manager. There was no need for this, and it could have been avoided with proper training.
2. 2. Know that there are forms of conflict resolution out there. I read so many contracts that have a default of litigation or a judge versus jury decision. Before going to court, think about mediation where you get an opportunity to make the decision. I had a client who was convinced she was heading to court over a broken partnership, but I convinced them to try mediation. It led to a satisfactory, quicker and less costly decision.
True North Business Consulting provides negotiation training and mediation. For more information contact us today!
- I am committed to Alternative Dispute Resolution as a way to solve business issues, especially mediation. For those unfamiliar with Alternative Dispute Resolution, or ADR and want to know more about it so that you can use it in your business, then I have created a course with Udemy (an academy of you). The first 50 people receive $10 off, that is half price, but it is only for a limited time so take advantage NOW to learn about using the processes negotiation, mediation and arbitration in an hour. Use code 10OFFADR at UDEMY. The class is also listed on the Business Program page.
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